/ 22 August 2023

Sean Phillips: ‘We need to turn around water sector’

Sean Phillips
Sean Phillips, the director general at the department of water and sanitation. (DWS/Facebook)

South Africa’s water sector is in a “downward spiral”, which must be turned around, said Sean Phillips, the director general at the department of water and sanitation (DWS).

The sector is characterised by poorly governed, poorly managed and underperforming institutions with high losses and high costs of inefficiency, which leads to low investment and poor services, which reduce payment, said Phillips in a recent presentation to the Water and Sanitation Sector Leadership Group, a strategic sector partnership forum.

Turning around the sector needs the creation of professionally managed, capable, efficient and financially viable institutions, which would increase investment, improve services and increase payment, he said.

Supply, demand for raw water

Phillips said South Africa’s raw water supply is  roughly in balance with demands on a national scale, but there are “localised deficits”.

But water availability could deteriorate rapidly as supply contracts and demand escalates. This is because of economic growth, population growth, urbanisation, inefficient use — including losses in municipal distribution systems — degradation of wetlands and climate change.

Delays in the implementation of surface water resource development projects in the past have been addressed and these projects accelerated, he said. 

These include the R40 billion Phase II of the Lesotho Highlands Water Project for Gauteng and surrounds, which is in progress; the R26 billion uMkhomazi Water Project in KwaZulu-Natal where the “affordability deadlock has been resolved”; and the R10 billion Vaal Gamagara project in the Northern Cape, in a public-private partnership with the mining sector.

Broadening water mix

Broadening the country’s water resource mix is critical for water security because the “potential to further develop its surface water resources is limited”. South Africa, a water scarce country, is already harnessing about 75% of its usable surface water. 

“There is a need to increase sustainable use of groundwater; desalination of seawater; return flows from treated wastewater systems; and reuse of other poor-quality water such as acid mine drainage,” Phillips said, noting that many of these are municipal functions.

Supply-side measures are necessary but not sufficient to avoid future water deficits, he said. “Water conservation and water demand management must also be implemented, particularly in domestic and general industrial use by reducing physical losses in municipal distribution systems.”

About 60% of national water resource infrastructure projects are funded by private sector finance. The National Water Resource Infrastructure Agency Bill is in public consultation and its establishment will enable more private finance to be raised, without necessarily requiring treasury guarantees, according to Phillips.


The failure to collect revenue and to pay for water is undermining the sector’s sustainability. Phillips said the rapid and unsustainable build of sector debt is at three levels, including money owed to water trading entities by water boards, municipalities and customers; money owed to water boards by municipalities and money owed to municipalities by customers.

On debt solutions, which Phillips said are being developed in a consultative manner, his department will collaborate with the treasury to ensure that equitable share allocations are withheld from non-paying municipalities. It will make certain that standardised credit control and debt recovery processes are put in place across all the water boards. 

This will include “consistent enforcement” of water restrictions on non-paying municipalities and legal processes to attach municipal bank accounts “where necessary”. Bulk prepaid metres will be installed by water boards in municipalities with a poor payment record.

Phillips said the 2022 Green Drop report showed poor and declining wastewater treatment performance with 334 systems (40%) in a critical state and 64% of systems in poor or critical state. The Blue Drop 2023 “indicates similar deterioration in water services, in terms of quality and reliability of supply”.

Department support 

His department has a constitutional obligation to support municipalities — and a legal mandate to regulate them.

“[The] Minister [Senzo Mchunu] has crisscrossed the country visiting those municipalities with severe challenges with water and sanitation services. In many of the worst performing municipalities, the minister and municipal leadership have agreed on improvement plans.”

The department’s contribution is in the form of grants of R12 billion a year from the Regional Bulk Infrastructure Grant and the Water Services Infrastructure Grant, and technical advice and management support from the department and water boards.

Some examples include the Nooitgedacht water transfer treatment scheme in Nelson Mandela Bay, Greater Mbizana Regional Bulk Water Scheme in the Alfred Nzo district municipality, several projects in Maluti-a-Phofung in the Free State and Emfuleni and Midvaal local municipalities and support by the department and Umgeni Water to eThekwini metropolitan municipality to improve the management of its wastewater treatment systems.

Limits to support

But there are limits to which support and intervention by the national government can address the decline in the reliability and quality of water and sanitation services, Phillips said.

“The cause of the decline is poor maintenance and operation by municipalities, which must be funded by revenue from the sale of water by municipalities to customers. 

“The DWS is repeatedly providing municipalities with grants to repair infrastructure, which is not maintained by the municipalities, deteriorates again rapidly, and then funding needs to be provided again. The high levels of support and intervention by the department are slowing the decline in water and sanitation services, not arresting or reversing it.”

To arrest and turn around the decline in municipal water and sanitation services, the municipal water and sanitation function must be fixed, which requires fundamental reform, he said.

Some of the reforms proposed include amending the Water Services Act to introduce a legal requirement that water services can only be provided by an entity (municipality or another) that has an operating licence; amending section 63 of the Water Services Act to strengthen enforcement through directives as is done in the National Water Act; and defining the functions that water service providers are accountable for.